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Author Question: How is the power of a test connected to the decision rule in hypothesis testing? What will be an ... (Read 45 times)

leilurhhh

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on: Jun 24, 2018
How is the power of a test connected to the decision rule in hypothesis testing?
 
  What will be an ideal response?

Question 2

What is the total cost of the product?
 
  A) 7,320,000
  B) 4,580,000
  C) 3,600,000
  D) 12,030,000


meryzewe

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Reply #1 on: Jun 24, 2018
Answer to Question 1

The decision rule is determined by the significance level chosen for the test, therefore the concept of power does not directly affect the decision to reject or fail to reject a null hypothesis. However, by computing the power of the test for particular significance levels and values of population parameters included in H1, we will have valuable information about the properties of the decision rule. For example, we will see that, by taking a larger sample size, the power of the test will be increased for a given significance level, . Another important use of power calculations occurs when, for a given sample size, we have a choice between two or more possible tests with the same significance levels. Then it would be appropriate to choose the test that has the smallest probability of Type II errorthat is, the test with the highest power.

Answer to Question 2

B


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